NEMA has threatened to ban production, sale, and use of plastic bottles if manufacturers fail to install collection points by April.
Director general Geoffrey Wahungu said manufacturers have until April 31 to comply.
The Kenya Association of Manufacturers (KAM) had in December last year pledged to set up collection points as well as Kenyans on proper disposal methods.
The agreement was that the plastics would be recycled and used in the construction industry.
"They should put those terminus as they had promised and if they fail to do so we will issue a total ban on plastic bottles," Wahungu said.
"We can’t have bottles blocking our drainages and littering our highways."
Ministry of Environment data shows that approximately 50 million bottles are used countrywide annually.
If implemented, the ban is likely to have a negative impact on companies that package their products in plastic bottles.
Currently, the environmental agency has imposed a ban on plastic bags.
Environment CS Judi Wakhungu banned the use of plastics through a Gazette notice on February 27, giving manufacturers six months — until August 28 — to clear their stock.
If anyone is found with plastic bags, they will attract a fine of between Sh2 million and Sh4 million, a jail term of between one and two years, or both.
However, Wahungu said they have a challenge with traders who still hawk their wares in plastic bags in Gikomba, Ngara, City Park and City markets.
He said the markets risk closure if they fail to enforce the ban on plastic bags.